I’ve been out of school for three years, am doing fine at work and things are all-around going ok. I got a promotion this year, and I’m finally making enough money to where I could afford to get an apartment of my own that isn’t a studio or in a dangerous part of town. My rent is probably more than I “should” be paying, but to me it’s worth it for some amenities and not having roommates. Lately, my parents’ two favorite topics of conversation have been 1) How ridiculous my rent is, and 2) how so-and-so from high school either just bought a house, or is buying a new house, etc. I couldn’t care less what people in my hometown (which is light years away from where I live now in terms of cost) are doing, and buying anything where I live now is out of the question. Still, this comes up often, and clearly they think that because some of my “peers” are doing it, I’m somehow not doing as well because I rent. Why are they so obsessed with home ownership? Sorry mom and dad, but I’d rather rent my apartment than plunk down $400k for a studio condo.

Thanks,

Josh

Josh,

Ugh, I know the feeling. I remember when I first moved to the Washington, D.C. area, I lived in a three-bedroom apartment that was nice, but not in a “posh” area or anything like that. I think my share of the rent was right around $1k, and at the time my salary was $45k. That’s $12k/year in rent, over ¼ of my gross pay and over ?..." of what I assume my take-home pay was. And that’s for the privilege of having one single bedroom in an apartment with three other people. A one-bedroom in the same building was something stupid, close to $2k per month. Say what you want about him, but Jimmy McMillan wasn’t kidding about that part.

Anyway, America has a complicated relationship with home ownership. For most of our history people have been renters, and it wasn’t until the 1930s that what we know today as a mortgage came about. Prior to that, mortgages usually financed no more than 50% of the price of a house, with payments spread out over a few years and ending in a balloon payment. Then the FHA stepped in and forced lenders to raise LTV (loan-to-value) ratios to upwards of 80% and beyond while also stretching payments out over the 15- and 30-year terms we’re familiar with. Either way, owning a home has always been a status symbol. Prior to the 1930s, it meant you were wealthy, and after that, it played a huge role in the creation of the middle class. As an aside, the preceding paragraph is basically the only thing I ever learned working at a retail bank.

That’s part of why home ownership is so important to your parents — it’s always been seen as something of a milestone achievement. It really wasn’t until the early aughts that just about anyone could qualify for a home loan (and we know how well that worked out). Before that (and since), it was about your income and your ability to handle debt — all things that signify you as a Real Adult. So that’s one thing — your parents want you to grow up into the man they raised you to be and home ownership is an easy identifier of that. Keep in mind too that if you grew up in a small town, they’re longed removed from the costs of city life, if they were ever part of it at all. That’s why they’ll say things like “wow, your rent is how much? You could buy a house here for that!” Yes, mom, I could, but I don't want to live there and I can’t buy one here for that.